Obama’s Midsession Budget Review: A Leading Indicator

Much attention is focused on the speech that President Obama will give next week–he and John Boehner are jockeying over the date–to unveil his new, improved job-creation plans. New, improved plans are required because what the Democrats did during the two years when they controlled all the levers of power in Washington was a total failure; but I digress.

Meanwhile, the administration’s mid-session budget review has been flying under the radar. By law–Title 31, United States Code, Section 1106–the Obama administration was supposed to provide by July 16 a summary update of the President’s proposed budget for the coming fiscal year. The so-called mid-session review includes revised estimates of receipts, outlays, budget authority and budget deficits which take into account changes in the economic outlook, etc., that “the President decides are necessary and appropriate based on current information.” Of course, our federal government hasn’t had a budget for more than two years, and the president’s February budget was voted down 97-0 in the Senate. So how, exactly, is he going to provide a mid-session review?

We will know soon, as the administration promises to release the updated budget outlook some time this week. That is beyond the statutory deadline by more than a month, of course, but in the Age of Obama, the executive branch is far too noble to abide by mere statutes.

Here’s guessing the administration quietly releases this document on Friday evening, for minimum press coverage. The press will most likely indulge the administration’s preference–for Obama, the less said about federal spending and the budget, the better–but it may still contain some interesting signals for those who know where to look. A reader emails:

This review is potentially significant, or will at least be insightful about the president’s agenda. If the review reflects little change from the president’s budget, then it suggests the president is still supporting his budget that lost 97-0 in the Senate. If there are significant changes, there needs to be a corresponding plan submitted to Congress reflecting them.

Further, if the president’s April speech calling for $4 trillion in deficit reduction is to be believed, this mid-session review should reflect how the administration intends to achieve the additional deficit reduction (since the Budget Control Act only has $900 billion plus the additional $1.2t to $1.5t depending on what happens with the supercommittee). If the review does not do this, it would mean that Obama’s April speech announcing a new ‘framework’ was a gimmick.

Finally, if the president’s rumored jobs plan intends additional spending, the document should explain in detail how the new spending would be financed (debt, other spending cuts, or tax increases).

So stay tuned. The president loves to express policy in terms of gauzy generalities rather than spread sheets, and no doubt his job-creation speech next week will be more of the same. But perhaps the mid-session review will give us a preview of where the bodies are really buried.